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Business News Digital
Spotify price increases reportedly imminent
By Chris Cooke | Published on Monday 24 July 2023
Spotify is expected to finally announce it is increasing its baseline subscription price in the US this week, from $9.99 to $10.99. Similar price rises will then occur in other markets, according to sources who have spoken to the Wall Street Journal.
The music industry has been pushing for price increases in the subscription streaming domain for some time, of course. The baseline price for Spotify in key markets has been 9.99 ever since the service first launched. This means, once inflation is factored in, the cost of a subscription has been declining year-on-year.
That matters to the music community because streaming is ultimately a revenue share business, with the streaming services committing to share a majority of their revenues with the music industry each month.
Though it also matters to Spotify’s shareholders, who have also been putting pressure on the market-leading premium streaming service to increase its prices of late.
Spotify has instigated some price increases in some markets already, but mainly in relation to things like the family plan. Meanwhile its main rivals – Apple Music, Amazon Music and, as of last week, YouTube Music – have all started shifting their baseline price from 9.99 to 10.99.
The music industry hopes that, once all the streaming services have instigated the first 9.99 to 10.99 price increase, the monthly subscription price will then keep up with inflation moving forward, meaning semi-regular increases. That has been the norm in the video streaming domain for some time.
There have also been reports recently that Spotify is planning on launching a higher priced subscription tier this summer which will offer higher quality audio plus access to a certain number of audiobooks each month.
Given that audiobooks seem to be a key part of that in-development premium premium tier, it’s not clear how much the music industry will benefit from the higher priced package. After all, presumably a portion of the extra money paid in by the subscriber on that tier will have to go to the publishers of the audiobooks the subscriber chooses to access.
When other streaming services first started dabbling with higher priced premium tiers – initially focused mainly on higher quality audio – that very much benefited the music industry by providing more revenue in which it could share.
